The global climate crisis and rising demands for environmental accountability are pushing companies, particularly Indonesia's manufacturing sector, to strengthen their sustainability practices. This study aims to analyze the influence of Green Intellectual Capital (GIC), financial performance, and carbon disclosure on the sustainability performance of Indonesian manufacturing companies over the 2022-2024 period. The study also examines the roles of Flexibility in Financial Management (FFM) and risk mitigation as mediators, and Green Corporate Governance (GCG) as a moderator. The method employed is embedded two-stage PLS-SEM on 300 panel observations from 100 effective companies. The results show that GIC has a positive effect on FFM (? = 0.332; p < 0.001) and sustainability performance (? = 0.130; p = 0.028), but has no effect on risk mitigation (? = -0.052; p = 0.299). Financial performance has a positive effect on FFM (? = 0.236) and risk mitigation (? = 0.369), but has no direct effect on sustainability performance (? = 0.064; p = 0.266). Carbon disclosure has a positive effect on risk mitigation (? = 0.205) and sustainability performance (? = 0.193; p = 0.001), but has no effect on FFM (? = 0.106; p = 0.136). The test results confirm asymmetric double mediation: FFM does not mediate any path (all p > 0.97), while risk mitigation fully mediates the effect of financial performance (indirect = 0.108; p = 0.020) and partially mediates the effect of carbon disclosure (indirect = 0.060; p = 0.043). GCG strengthens the risk mitigation-to-sustainability performance path (? = 0.347; p = 0.002) but does not moderate the FFM-to-sustainability performance path (? = -0.172; p = 0.135), confirming path-specific moderation and a governance-flexibility disconnect in Indonesia's manufacturing sector. IPMA analysis identifies carbon disclosure and GIC as the primary intervention priorities. The findings affirm that sustainability performance is not determined by financial strength alone, but by the integration of green capabilities, carbon disclosure quality, and governance that directs risk management capacity toward strategic sustainability goals.
Adams, J. (1995). Risk.
Aguilera, R. V, Aragón-correa, J. A., Marano, V., & Tashman, P. A. (2021). The Corporate Governance of Environmental Sustainability : A Review and Proposal for More Integrated Research. Journal of Management, 47(6), 1468–1497. https://doi.org/10.1177/0149206321991212
Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108
Baron, R. M., & Kenny, D. A. (1986). The Moderator-Mediator Variable Distinction in Social Psychological Research : Conceptual , Strategic , and Statistical Considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173
Ben-Amar, W., & McIlkenny, P. (2015). Board Effectiveness and the Voluntary Disclosure of Climate Change Information. Business Strategy and the Environment, 24(8), 704–719. https://doi.org/https://doi.org/10.1002/bse.1840
Brennan, N. (2001). Reporting intellectual capital in annual reports: evidence from Ireland. Accounting, Auditing & Accountability Journal, 14(4), 423–436. https://doi.org/10.1108/09513570110403443
Chen, Y. (2008). The Positive Effect of Green Intellectual Capital on Competitive Advantages of Firms. Journal of Business Ethics, 77(3), 271–286. https://doi.org/10.1007/s10551-006-9349-1
De Giuli, M. E., Grechi, D., & Tanda, A. (2024). What do we know about ESG and risk? A systematic and bibliometric review. Corporate Social Responsibility and Environmental Management, 31(2), 1096–1108. https://doi.org/https://doi.org/10.1002/csr.2624
Freeman, R. E. (2010). Strategic Management: A Stakeholder Approach. Cambridge University Press.
Friedlingstein, P., Sullivan, M. O., Jones, M. W., Andrew, R. M., Gregor, L., Hauck, J., Quéré, C. Le, Luijkx, I. T., Olsen, A., Peters, G. P., & Peters, W. (2022). Global Carbon Budget 2022. 4811–4900.
Gamba, A., & Triantis, A. (2008). The Value of Financial Flexibility. The Journal of Finance, 63(5), 2263–2296. https://doi.org/https://doi.org/10.1111/j.1540-6261.2008.01397.x
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (3rd ed.). SAGE Publications, Inc. https://us.sagepub.com/en-us/nam/a-primer-on-partial-least-squares-structural-equation-modeling-pls-sem/book270548
Hina, K., Khalique, M., Abdul, J., Shaari, N., & Rafi, M. (2024). Nexus between green intellectual capital and the sustainability business performance of manufacturing SMEs in Malaysia. Journal of Intellectual Capital, 25(2), 233–252. https://doi.org/10.1108/JIC-11-2022-0226
Hina, K., Khalique, M., Shaari, J., Mansor, S., Kashmeeri, S., & Yaacob, M. (2024). Nexus between green intellectual capital and the sustainability business performance of manufacturing SMEs in Malaysia. Journal of Intellectual Capital, 25. https://doi.org/10.1108/JIC-11-2022-0226
Indonesia, P. B. E. (n.d.). Laporan Keberlanjutan 2024: Mempercepat Pencapaian untuk Menuju Titik Nol Berikutnya (Accelerating Milestone to Advance Towards Net Zero). www.idx.co.id
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/https://doi.org/10.1016/0304-405X(76)90026-X
Khanra, S., Kaur, P., Joseph, R. P., Malik, A., & Dhir, A. (2022). A resource-based view of green innovation as a strategic firm resource: Present status and future directions. Business Strategy and the Environment, 31(4), 1395–1413. https://doi.org/https://doi.org/10.1002/bse.2961
Kilic, M., & Kuzey, C. (2019). Determinants of climate change disclosures in the Turkish banking industry. International Journal of Bank Marketing, 11(1), 901–926. https://doi.org/10.1108/IJBM-08-2018-0206
Liu, Y., Kumar, S., Liu, H., Li, S., & Zhou, Z. (2025). ESG performance, digital transformation, and green innovation. Humanities and Social Sciences Communications, 12(1), 1793. https://doi.org/10.1057/s41599-025-06027-9
Naseer, M. M., Khan, M. A., Bagh, T., Guo, Y., & Zhu, X. (2024). Firm climate change risk and financial flexibility: Drivers of ESG performance and firm value. Borsa Istanbul Review, 24(1), 106–117. https://doi.org/https://doi.org/10.1016/j.bir.2023.11.003
Nikolaou, I. E., Tsalis, T. A., Kostakis, I., & Stergiopoulou, F. (2024). Green Intellectual Capital : a critical factor to explain the relationship between corporate sustainable and financial performance. Environment, Development and Sustainability, 26(9), 22863–22884. https://doi.org/10.1007/s10668-023-03579-1
Novena, M., & Jatmiko, B. P. (n.d.). Emisi Karbon Global Pecahkan Rekor Baru pada 2024. Kompas. https://lestari.kompas.com/read/2024/11/14/154347586/emisi-karbon-global-pecahkan-rekor-baru-pada-2024
Shusil. (2013). Managing Flexibility : Developing a Framework of Flexibility Maturity Model. Proceeding of GLOGIFT 13, December, 1–15.
UNFCCC. (2015). Paris agreement.
Wang, Q. J. (2023a). Financial effects of carbon risk and carbon disclosure : A review. Accounting & Finance Published, 63, 4175–4219. https://doi.org/10.1111/acfi.13090
Wang, Q. J. (2023b). Financial effects of carbon risk and carbon disclosure : A review. 4175–4219. https://doi.org/10.1111/acfi.13090
[27] Wilde, G. J. S. (1982). The Theory of Risk Homeostasis: Implications for Safety and Health. Risk Analysis, 2(4), 209–225. https://doi.org/https://doi.org/10.1111/j.1539-6924.1982.tb01384.x
Wu, L., Yi, X., & Hu, K. (2024). The effect of ESG performance on corporate green innovation. Business Process Management Journal, 31(8), 24–66. https://doi.org/10.1108/BPMJ-04-2023-0237
Zhang, H., Zhang, Z., & Steklova, E. (2020). Do Companies Need Financial Flexibility for Sustainable Development ? Sustainability Article, 12(1811), 1–14.
Zhao, X., Lynch John G., J., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis. Journal of Consumer Research, 37(2), 197–206. https://doi.org/10.1086/651257
Yucha, N., Ratnawati, T., & Priyawan, S. (2026). The Influence of Green Intellectual Capital, Financial Performance, and Carbon Disclosure on Sustainability Performance: Asymmetric Mediation and Path-Specific Moderation in Indonesian Manufacturing Companies. International Journal of Academic Research in Business and Social Sciences, 16(8), 79–95.
Copyright: © 2026 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
